In an article published on statefarm.com this month, Co-Founder Zach Morris offered his insight and expertise on wealth transfers.
5 Things to Understand about Wealth Transfers
One reason some people focus on building wealth over a lifetime is to be able to pass along resources and provide opportunities to their children and grandchildren. But it takes time and planning — as well as conversations about expectations and shared values — to have this transfer work well for everyone.
Even the Most Disciplined of Planners Can Fall Victim to Faulty Planning Practices
Even if you consider yourself an accomplished and disciplined planner – and, perhaps, even more so if you fall into this category – it’s uncomfortable to face unexpected financial hurdles. Since no one can perfectly plan for the unexpected, however, it happens from time to time. It could be that your career takes a turn you didn’t foresee, or maybe your child’s college education ends up far costlier than you expected. All of a sudden, you find yourself facing a future where your savings goals may be in jeopardy.
Although no planning is foolproof, avoiding some common – and faulty – planning assumptions can help ensure your long-term goals won’t be in danger.
If you’re considering setting up a living trust, know that there is more to it than simply meeting with a lawyer and signing the appropriate paperwork. Your trust won’t have any power until you fund it. To do so, you’ll need to strategize about which assets you’ll put in the trust, and then complete the necessary transfers.
For most people, there are assets that make sense to transfer to your trust, but others that you’re likely better off leaving outside the trust. Below we’ll dig into the details of both. First, though, let’s discuss the basics of a living trust.
Why Choose a Living Trust?
If you’re looking to manage your assets during your lifetime and find a way to easily pass them to your beneficiaries when you die without going through the hassles of the court system, a living trust is for you. This legal structure allows your estate to bypass probate, which is advantageous for several reasons.
Not only is probate complex, time-consuming and expensive, it also means your estate information will become public record. A trust, on the other hand, allows you to keep your finances private. Furthermore, this legal instrument gives you more control over which of your heirs get certain assets, and even when they are able to access them. For example, you could choose to pass some of your assets to your children when they turn 18, with a percentage held back until they reach age 40.
Running your business day to day takes all of your energy and focus. Your waking hours are consumed with managing and sustaining it, and you likely spend many a sleepless night on the details no one else thinks about. This is the life of a committed small business owner.
When you’re grinding day after day to keep your business well-positioned, however, it can be easy to lose sight of the bigger picture. Specifically, it becomes difficult for many small business owners to find the time to monitor the overall health of their business in a meaningful way. The five-step guide below is designed to help you focus on five key elements of your business’ financial health.
Ways to Ensure the Wealth You Pass on Stays with Your Children
It’s a blessing to be able to pass on significant assets to your children – and it’s likely one of the reasons you worked so diligently and saved so strategically throughout your lifetime. It’s natural to want to keep your wealth in the family, especially as we find ourselves living through an economically uncertain time. Even though you might love your daughter-in-law or son-in-law very much, recent world events have reminded us that you can’t predict what the future may hold. This leads many people to wonder whether there’s a way to leave money to their children without passing any rights on to their children’s spouses.
Typically, once you pass assets to your children outright, their spouses will have equal rights to those assets. When you have positive relationships with the spouses, it’s natural to feel a bit guilty about trying to avoid passing on any rights to your wealth. However, if you feel strongly about preserving your financial legacy for your children, there are ways to do so.
Working from Home During the Pandemic? You Probably Can’t Deduct Your Expenses
If you’ve been working from home during the COVID-19 pandemic, you’re not alone. One of the side effects of this global health crisis has been an unprecedented experiment in forced remote work for the masses. While most states are beginning to open back up, social distancing policies are still encouraged, meaning many taxpayers are still working from home in this “new normal” we’re becoming accustomed to. In fact, a recent survey shows that 43 percent of Americans hope to continue working from home at least part-time when the pandemic subsides.
If you’re one of the millions clocking in from the comfort of your own home each day, you may be wondering whether you can take advantage of the home office tax deduction. In the past, employees who worked from home could deduct home office expenses like computer equipment and office furniture as a miscellaneous itemized deduction on line 21 of Schedule A. However, that rule has changed.
Expertise.com chose 22 financial advisors out of 145 in Atlanta, GA as the best of the best and Paces Ferry Wealth Advisors was among that exclusive group. The selection process was based on the following criteria:
In some things in life – love, in particular – age is a fairly meaningless number. When it comes to financial planning, however, age can begin to matter quite a lot. This is why it is exceedingly important for spouses with a wide age gap to have a long-term financial plan in place. As we collectively face a time of economic uncertainty, smart long-term planning can also offer you peace of mind.
Long-term financial plans include retirement planning, of course, and this is an area in which traditional advice often won’t work well for couples separated by a decade or more. If you and your spouse are in this scenario, you’ll need a retirement plan that can accommodate the needs of two different stages of life.
Let’s explore a few of the considerations that mixed-age couples need to be aware of for proper retirement planning.
From gifting money to children to transferring ownership of a home, it’s important to understand some parameters for the best way to pass on inheritance.
One reason some people focus on building wealth over a lifetime is to be able to pass along resources and provide opportunities to their children and grandchildren. But it takes time and planning — as well as conversations about expectations and shared values — to have this transfer work well for everyone.
The concerns about wealth transfer vary, from worrying about estate taxes to keeping a home in the family. So what is the best way to pass on an inheritance and set up an estate transfer the way you want? Consider these steps.
The internet offers lots of DIY estate planning and financial tools, such as an online will maker and guides for advanced directives. Should you learn how to make a will for free and create your own package of estate documents or should you hire professional help? These considerations can help.
A husband and wife came to Zach Morris, co-founder of the Atlanta-based Paces Ferry Wealth Advisors, after completing an online will maker. Upon reviewing the documents, Morris, whose firm is a registered investment advisor with the SEC, realized that they had each decided to leave $10,000 and their dog to their best friend. But the will didn’t state what to do with the animal (or the money) if the friend died before them — meaning the couple could have accidentally left their pet and $20,000 to their best friend’s next-of-kin.
It was a small error, but one that illustrates the risks of taking a DIY route for financial and estate planning. “When you’re talking about legal terms, it’s really something that you want to get right,” Morris says.
